FEG in Trouble As Financial Backing Falls Through and NYE TV Deal Has Yet to Be Struck; DREAM and K-1 On Life Support

(All for one and one for all….right guys?)

The plausibility that DREAM and K-1 will continue past the first quarter of 2011 is looking bleak as the promotions’ parent consortium, Fighting and Entertainment Group (FEG) has failed to secure much needed financial backing.

A $200 million deal that was in the works with Japanese capital investment firm PUJI has collapsed according to Fighters Only and it seems that the reason the agreement fell through was because the popularity of kickboxing and MMA in The Land of the Rising Sun” is waning.

Some red flags that signalled to PUJI that Japan’s interest in combat sports is on the decline were a dramatic drop in advertising dollars, live gate revenue and FEG’s inability to secure a television deal for its K-1 Dynamite! New Year’s Eve show this year. Investors weighed the risks of the deal and decided that FEG had grossly exaggerated the value of the company and the potential revenue that could be made in Japan, given the current state of the sport in the country.

The fact that several fighters have yet to be paid for FEG fights they competed in under both the K-1 and DREAM banners in 2010 speaks volumes about the dire circumstances the company is in. When you aren’t making money and you have employees whose exorbitant salaries aren’t being paid, maybe it’s time to re-evaluate your place in the business world.

Fight Opinion’s Zach Arnold lays out some scenarios that could keep the struggling company afloat for at least one or two more shows if it pays the Tokyo Broadcasting System to broadcast its events or gives them the broadcast rights for free to ensure that its shows make it onto TV in Japan (HDNet broadcasts FEG shows in North America), but if that happens, then it isn’t likely that K-1 and DREAM will survive until next spring.